Monday, September 10, 2018

What happened to the GBP? Are we expecting 1.4300 levels in the coming months?


GBP trades over the past three months have been sideways, some climbing higher than 1.300 and dropping towards 1.26
Many traders have been implicated (and some analysts) in misinterpretations of these moves, some forecast sharp falls, some expected a corrective rise before the collapse
No one expects to return to pre-2016 levels
Those who followed our analysis will find that we have been betting heavily on the strong rise of the pound despite the negative news. There was confirmation that we are seeing a slow rise of the pound sterling but those who have been looking for short periods did not realize it


With the British exit referendum from the European Union, the pound fell against the dollar down 1.20
The downtrend did not last long. Since December 2016, the pound has been moving upwards and continuously towards a return to pre-2016 levels, but it needed positive news on Britain's negotiations with the European Union

Looking at the chart we will find that we were on a long rally and that the targets were around 1.46 all the time while analysts advised selling from slightly higher levels of 1.30

Strangely, at the same time we were seeing a drop in the USD index from 101 levels but no one was paying attention to it. It was a panic that dominated the buyers and pushed them either to close their positions or get involved in bad selling deals

In any case, we still recommend buying the pound without looking at the news with stop loss levels at 1.2300 and profit taking at 1.43

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